Looking to integrate your Envestnet MoneyGuide and Riskalyze accounts? Check out our article HERE.
Many passionate Riskalyze advisors use Envestnet MoneyGuide as their financial planning tool of choice. So what’s the easiest way to use Riskalyze and Envestnet MoneyGuide in harmony?
In This Article
- Sample Workflow
- Matching MGP Preset Portfolios to Riskalyze Risk Numbers
- Using Custom Portfolio Sets in MGP
- Adjusting MGP's Historical Period
- Using Custom Asset Allocations in MGP
Most advisors begin the financial planning process in Riskalyze, then move to Envestnet MoneyGuide to develop their client's comprehensive financial plan. Once you've completed the initial setup of Envestnet MoneyGuide for optimal use with Riskalyze (as described in the sections below), you are ready to start using MoneyGuide and Riskalyze together!
Here is a sample workflow to use:
- Capture your client's Risk Number with Riskalyze.
- Analyze your client's portfolio in Riskalyze.
- Use Retirement Maps for a precursory discussion of goals.
- Create a new Plan with MoneyGuide (such as a Financial Goal Plan, Lifetime Income Plan, etc.).
- Set the client or household "Loss Tolerance" based on the client's Riskalyze Risk Number.
Matching Envestnet MoneyGuide Preset Portfolios to Riskalyze Risk Numbers
If you prefer to use Envestnet MoneyGuide's preset portfolio templates without modification, here is a reference chart showing how each preset aligns to the Riskalyze Risk Number for a portfolio with the same asset allocation:
|Envestnet MoneyGuide Portfolios||Riskalyze Risk Number Ranges|
|Capital Preservation I||1-35|
|Capital Preservation II||36-41|
|Total Return I||53-57|
|Total Return II||58-65|
|Capital Growth I||66-72|
|Capital Growth II||73-77|
Using Custom Portfolio Sets in Envestnet MoneyGuide
Most advisors will create a set of Model Portfolios in Riskalyze, then set these models up as "Custom Portfolios" within Envestnet MoneyGuide.
Start by adding a new Portfolio Set in Envestnet MoneyGuide ( User Options -> Create Portfolios), then use Add Portfolio to create a new portfolio.
Enter a name to use for the Portfolio, and the asset allocations to use. For ease of recognition, use the same name for the Portfolio as the model that you created in Riskalyze.
Matching Envestnet MoneyGuide Risk Scoring to Riskalyze Risk Numbers
Once you have added your Custom Portfolios to MoneyGuide, edit the "Standard Risk Scoring" and map the range of Risk Numbers from your Riskalyze model portfolios. For example, if you have a conservative model that you use for clients with a Risk Number of between 1 and 34, set the Score Range Beginning Value in MoneyGuide to 1. Likewise, set the Score Range Beginning Value for your next more aggressive model to 35, and so on.
Then, when setting your client's Risk Number in MoneyGuide, the closest matching Portfolio will be shown above the slider:
Adjusting Envestnet MoneyGuide's Historical Period
To ensure that Envestnet MoneyGuide and Riskalyze operate on the same historical timeframe for data, you may wish to change Envestnet MoneyGuide's Historical Period to match Riskalyze's January 1, 2008 to present timeframe. You can make this change under User Options -> Create Portfolios -> Edit Historical Period.
Using Custom Asset Allocations in Envestnet MoneyGuide
One additional step many Riskalyze and MoneyGuide users take is to set up custom Asset Classes within MoneyGuide so that both MoneyGuide and Riskalyze use the same specific investments (rather than generic asset classes) in their analysis: